Wall's faces fourth MMC inquiry into ice cream sales

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The Independent Online
UK ICE CREAM manufacturers are to face a fourth full-scale investigation of their business practices by the Monopolies and Mergers Commission, it was announced yesterday.

John Bridgeman, the Director General of Fair Trading, said there appeared to be insufficient competition in the industry, which is dominated by Birds Eye Wall's.

Mr Bridgeman said: "Overall this is a problematic sector which requires a thorough and wide-ranging review."

The MMC will only look at the market for impulse ice cream - ice cream bought for immediate consumption - in which Wall's, part of the Unilever Group, has a market share of almost 70 per cent.

The commission will focus on the issue of freezer exclusivity - when a manufacturer provides a freezer to a retailer on the condition that it is used only for the manufacturer's products. Mars, which entered the UK ice cream market 10 years ago, said: "Mars' progress in the impulse market has been severely hampered by aggressive anti-competitive practices."

Iain Ferguson, Wall's chairman, said: "We see little point in an inquiry at this time. Wall's has achieved its position in the ice cream market through innovation, market forces and fair competition and is not behaving anti-competitively."

The industry was given a clean bill of health by the MMC after an inquiry in 1979 and again in 1993/94.

In 1997/98 the MMC investigated the relationship between Birds Eye Wall's and its wholesalers, and published a report last summer which the MMC said had raised "wider concerns", including the issue of freezer exclusivity.

The new inquiry, which will last nine months, had been widely anticipated by the City, and shares in Unilever rose 12.5p to 657.5p.

Outlook, page 11

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